Analysis finds $55M shortfall in Minneapolis stadium plan

As stadium planners winnow down the potential locations for a new football stadium in downtown Minneapolis, new questions are cropping up about the city's plan to pay for it.

A financial analysis obtained by MPR News shows the city is nearly 20 percent short of the pledge it hoped to make to the project. The report also includes some steep new fees in the deal, including a $25 charge to park on downtown streets on game days.

The analysis, released this week, is the most detailed look yet at the dollars and cents behind a Minneapolis stadium deal. It's the homework city officials are doing as they put together a winning bid of $313 million to keep the Vikings downtown. They want a $150 million upgrade for Target Center, as well.

THE STADIUM MATH

"It doesn't add up," said Minneapolis City Council Member Gary Schiff, a stadium opponent.

The city's stadium finance consultant, Mark Kaplan, provided the analysis to Schiff and the rest of the council. It shows the city is more than $50 million short of the $313 million planners pledged as a local contribution to a new stadium.

That works out to a deficit of more than $100 million over the 30-year life of the deal, Schiff said.

"So far, the city plan has a $107-million gap even after we use every sales tax that we have access to for the next 30 years," Schiff said.

Schiff fears that given lawmakers reluctance to impose new taxes as part of the deal, existing property taxes may have to fill all or part of that gap, which comes to about 1 percent of the 2012 city levy annually.

Mayor R.T. Rybak and other city officials declined repeated requests to discuss the Minneapolis plan. But Rybak's spokesman John Stiles confirmed the numbers in the analysis.

Stiles said the city is $55 million short of its pledge. He said the city had always acknowledged that the plan "comes up a little short," but that the city hopes negotiations will narrow that gap.

Several city council members say they also believe the city is considering paring back its plan for upgrades to the Target Center costing $150 million — a key selling point for the city council.

Metropolitan Sports Facilities Commission chairman Ted Mondale did not return requests for comment on the matter. Officials for the Minnesota Vikings also said they had no comment on the issue.

NEW FEES TO MAKE UP THE SHORTFALL

Questions remain about some of the money the city says it has.

The plan contains 10 unique sources of revenue.

One calls for parking costs to bump up to $25 on city streets around the Metrodome on game days. Costs for stalls in nearby city ramps would rise to $30 each for Vikings home games. Those parking fees alone account for about 6 cents of every dollar the city has pledged to the stadium deal.

City Council member Lisa Goodman, who represents downtown around the Metrodome site and is a stadium opponent, said she was unaware of the new parking fees, listed in a city spreadsheet.

"To hide in the corners of the proposal that residents who live downtown, and people who own property downtown, and businesses would have to pay $25 to park on their own street — it's really bad public policy," Goodman said. "If people knew this was going on, they'd be even more outraged."

Goodman is also upset that the plan would divert money from the existing debt on city parking ramps.

There is also a potential revenue source that raises even further questions: The city plan calls for a new tax on Vikings tickets.

The city's 3 percent downtown entertainment tax currently does not apply to Vikings games. That would change in the new plan, which would collect another $1.6 million annually from fans.

That could be considered a new tax, and a potential violation of GOP ground rules for a stadium deal. Without it, the city would have a gap of an additional $36 million in its deal — totaling a difference of more than $90 million between what Minneapolis says it can pay and what the city has on hand.

Stadium bill sponsor Morrie Lanning, a House Republican from Moorhead, says the financing gap and a ticket tax are among the challenges stadium negotiators have asked Minneapolis to solve.

"New taxes are a problem," Lanning said. "If that's still in the proposal at the end, after they respond to us, then that's going to be difficult to achieve."

City officials say they don't believe the entertainment tax in the plan is a new tax, and that the current exemption only applies to the Metrodome. They believe the exemption for Vikings games won't apply in a new home.